| Thu 18 Apr 2002, 0:00 | | Wooltru Agm - Chairman's Statement |
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Chairman's statement
The year under review was a busy one for Wooltru, as it continued the
implementation of its strategy to realise the value of its assets for
shareholders. Significant progress has been made, despite many obstacles,
and I must pay tribute to my colleagues and advisers who have devoted
enormous amounts of time to negotiating and implementing solutions to the
challenges posed by this strategy. Over the 21 years of being a listed
holding company, many complex and interconnected arrangements were formed
between group companies, all of which we have now had to unwind.
Some of these companies are public and have other shareholders' interests to
take into account, thereby increasing the number of stakeholders affected by
the process. Other Wooltru interests were unlisted and/or have been under-
performing, complicating the unwind process as creditors and other stake
holders in these businesses had historically relied on the strength of the
Wooltru Group as a whole. All these stakeholders' rights and needs have had
to be addressed.
Those who have been involved can be commended on their efforts, which have
resulted in a significant number of the assets being disposed of, including
CNA, In-the-bag, Topics, and properties with a combined total value of R360
million. A number of significant intra-group guarantees have been unwound,
including the Masstores promissory notes, which totalled R1.6 billion in
face value. Wooltru's interest in Affinity Logic has also been sold, subject
to certain conditions that remain outstanding, whilst a number of other
commercial arrangements, including the intra-group treasury function,
Wooltru Insurance and the Wooltru staff share incentive scheme have been re-
organised and/or settled. These disposals have all been conducted in a
responsible manner in a less-than-buoyant market, subjugating haste to
proper process so as to meet Wooltru's commitment to good corporate
governance.
Notwithstanding the success in dealing with the commercial and legal
impediments to the unbundling, the Board's resolve to distribute to
shareholders Wooltru's holdings in Massmart, Truworths and Woolworths has
been delayed by unforeseen legislative uncertainties. The recent Act of
Parliament that was introduced to encourage unbundlings has highlighted
these uncertainties. The Board has engaged the South African Revenue Service
in this regard and awaits its response. Until this is received, the Board is
reluctant to proceed with the unbundling. We are hopeful that the necessary
clarity will be reached soon.
In the interim, the nine full-time staff within Wooltru, and Wooltru's
advisers continue to take care of the remaining issues, so that, when
Wooltru is be able to proceed with the unbundling, all matters that are
required to be dealt with prior to the voluntarily winding up of the Group,
will have been actioned.
Louise Tager
Chairperson
Cape Town
18 April 2002
